Canadian stocks end higher after mixed session

LianaB. Baker

SAN FRANCISCO (MarketWatch) -- Canadian stocks closed higher Thursday, pushed by gains in gold and oil futures after bouncing between highs and lows for most of the session.

The S&P/TSX composite index (ISPTX) finished up 0.2% at 11,979.

Shares of pulp and paper producer Domtar Corp. (UFS) gained 3.8%. Deutsche Bank said earlier in March that the already-lean supply of pulp and paper this year could be affected by supply disruptions in Chile, which provides 8% of global pulp production. A 7.2-magnitude aftershock struck the country Thursday morning.

Shares of Research in Motion
RIMM
(RIM) gained 0.9%, more than 3% rise for the week.

Statistics Canada released data Thursday showing that the Canadian economy continued to recover in January, and its trade surplus grew more than expected. It was the second-straight month with a trade surplus.

Eric Lascelles, chief economics and trade strategist for TD Securities, said the trade data doesn't point to overall economic growth in Canada, especially because of the weak 0.5% growth in exports in January

"This report surprises in the strength of the trade surplus but disappoints in the tepid nature of export growth, leaving the overall assessment rather mixed," Lascelles said.

Krishen Rangasamy, a CIBC World Markets economist said the sluggish export growth will hurt the Canadian GDP numbers that will come out at the end of March. He said exports only rose in January because of higher commodity prices, and not because of trade volumes.

"What matters for GDP is volumes and the drop in real exports will evidently be a drag on January's output," Rangasamy wrote in a note Thursday.

Data released in China on Thursday showed faster-than-expected inflation, which renewed concerns that stimulus measures could be withdrawn early. That caused uncertainty in the Canadian markets, particularly in the metals and mining sector. shares of Kinross Gold Corp. (K) fell 0.5% after paring some of its earlier losses. The company said on Thursday it would pay $2.56 a share for full control of Underworld Resources Inc., (UW) a mining company with operations in the Yukon Territory. Kinross said in a statement that the deal values Underworld at 139.2 million Canadian dollars ($135.9 million).

Oil and gold futures each finished their trading session with modest gains. Gold for April delivery closed up 10 cents at $1,108.20 an ounce on the New York Mercantile Exchange, while oil ended up 2 cents at $82.11 a barrel

The loonie was trading slightly higher with one U.S. dollar buying 1.0242 Canadian dollar. CIBC's Rangasamy said that the "weak Canadian trade report took some steam out of the Canadian dollar."

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